AOL, now owned by Verizon Communications, is going to buy Millennial Media, which is a mobile ad firm. According to the NY Post, AOL will be spending about $250 million in cash to acquire Millennial Media.
This deal will allow AOL to deliver more ads to users’ smartphones and tablets. As of right now, Millennial Media, based in Baltimore, delivers advertisements to 65,000 apps. Michael Barrett, the CEO of Millennial, said that by joining AOL, the company will be adding additional mobile expertise to AOL’s technology assets.
According to Baltimore Sun, AOL’s plans to buy Millennial came to light on Thursday, when AOL said that it was going to acquire Millennial. The deal with AOL may be able to rescue Millennial, as it has struggled to compete with the likes of Google and Facebook.
Some observers have acknowledged that AOL and Millennial could do good together, but some have questioned the futures of both AOL and Millennial’s local work forces in Baltimore. There are around 450 people who work in two offices, which are located less than a mile from one another.
Employees of AOL and Millennial were told by the companies that AOL was not only acquiring Millennial for the company’s technologies, but also for the people who build the technologies and bring them to the market. The employees were also told by AOL and Millennial that the companies were going to review opportunities in an effort to maximize office space, as well as location.
AOL expects that this deal will help accelerate its position in markets such as Germany, Singapore, and Japan, according to Wall Street Journal. Bob Lord, the president of AOL, said that the acquisition of Millennial will help AOL accelerate their competitive mobile offering in ONE by AOL.
The deal is likely going to close in the fall.
Millennial Media ended up going public back in 2012, but the company’s stock has taken quite a few hits. On Thursday, Millennial Media’s stock closed at $1.74, which was a 30 percent increase. When the company sold shares to the public in March, 2013, it sold the shares for $13 each. Meanwhile, mobile advertising has been dominated by Google and Facebook.
As for AOL, Verizon bought the company in a deal worth $4.4 billion. The deal was aimed at advancing Verizon’s ambitions in mobile advertising and mobile video. AOL has advanced technology that it uses to sell advertisements, as well as to deliver web videos of high quality.
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